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News >> Technology >>
IBM to acquire Filenet for $1.6 B
By agencies
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Friday, 11 August 2006, 19:30 IST
NEW YORK: Taking forward its competition against EMC corp. in the corporate content management sector, IBM on Thursday announced its plans to buy business software maker FileNet Corp. for $1.6 billion.
In International Business Machines Corp's efforts to boost profit margins in its services business, this all-cash transaction is the third software-related acquisition company has announced in a week.
The acquisition gives IBM a definitive edge over EMC in the market for programs that corporations use to manage text documents along with images, audio, video files, as FileNet had reported a higher-than-expected quarterly profit in July this year. The corporation now plans to combine FileNet's operations with its content management business.
IBM said it entered into a definitive agreement to buy FileNet at $35 per share, which would be a 1 per cent premium over FileNet's Wednesday closing price of $34.65 on Nasdaq. The all-cash deal is expected to close in the fourth quarter, subject to shareholder and regulatory approval.
Last week, IBM had agreed to buy MRO Software Inc. for $740 million in cash and bought privately held Webify Solutions for an undisclosed amount to expand in the fast-growing market for integrating corporate software systems. With this, IBM has made about 40 acquisitions in the past three years, and has said it plans further deals in software and services.
IBM's software group had a gross margin of 84 per cent in the second quarter, compared with 26 per cent in services and 34 per cent in hardware, according to its financial reports.